10 Things to Know About Living in Las Vegas
Living in Las Vegas is quite different than just visiting the Strip.
The post 10 Things to Know About Living in Las Vegas appeared first on Apartment Living Tips – Apartment Tips from ApartmentGuide.com.
Living in Las Vegas is quite different than just visiting the Strip.
The post 10 Things to Know About Living in Las Vegas appeared first on Apartment Living Tips – Apartment Tips from ApartmentGuide.com.
Spring is an often-busy time for home buyers and sellers who want to make deals and moves when it’s warm outside and the school year is coming to a close. But selling a primary home or an investment property comes loaded with tax consequences.
I interviewed Collier Swecker about key tax considerations home sellers should know to pay less. He’s a founding partner of the Mega Agent real estate team at RE/MAX Advantage, recognized as RE/MAX's #1 selling team in the Birmingham, Alabama market.
Collier is a distinguished HomeLight agent, awarded for ranking in the top 1% of all agents in his area. He leads one of the most technologically advanced and forward-thinking real estate teams in Alabama.
But on top of all those accolades, Collier graduated from Auburn University with a law degree and Washington University School of Law in St. Louis with a Master of Law in Taxation. He was the principal partner in Swecker and Sparks, a law practice in Auburn, Alabama, for three years. He left the practice in 2006 to pursue a new career in real estate development and sales.
Click on the audio player above to listen to the interview. Here are some of the real estate and tax topics we cover:
[Listen to the interview using the embedded audio player or on Apple Podcasts, Stitcher, and Spotify]
Use these tips from HomeLight’s Corinne Rivera to avoid expensive tax mistakes when selling a home:
Give yourself a pat on the back—you sold your home! Your sale profit is sitting pretty in your bank account, but with Tax Day quickly approaching, will the IRS take a chunk of your proceeds?
“The majority of America does not need to worry about that,” says Collier Swecker, a Jefferson County, Alabama real estate agent who ranks in the top 1% of agents in his area.
That’s good news, but to make sure you’re in the clear and that you file a tidy tax return, ask yourself these questions relevant to home sellers during tax season:
If you sold your home in 2018, these are the documents you’ll need when you file your taxes.
If you’re a single tax filer and your adjusted capital gain on your home sale is $250,000 or less, you qualify for the capital gains tax exclusion. Married filers can exclude gains up to $500,000. The IRS considers profits in excess of these amounts to be taxable income.
“The biggest thing is to make sure that the homeowner has lived in the house two out of the last five years to qualify for that exemption,” says Swecker.
For example, if you’re a single taxpayer who’s lived in your home for five years, and your capital gains from the sale were $300,000, you must pay taxes on $50,000 of that profit. But, if your capital gains were $100,000, you’re in the clear!
To calculate the capital gain from your home sale, you’ll need to calculate your adjusted cost basis for the house. Here’s how to break down the numbers:
The number left over is your adjusted cost basis, or how much your home actually cost you. Next, here’s how to figure your capital gain.
The remaining amount is your adjusted capital gain, which is the profit you made on the sale.
You can use capital improvement costs to increase your cost basis, which in turn reduces your capital gain. A lower capital gain means less tax liability.
But the cost of “improvements” doesn’t include routine repairs and maintenance costs. The only improvement costs you can include are those that increased your home’s market value.
“In my own house recently, I had a problem with a window, but I decided that all of them should get replaced,” Swecker says. “Now, that would be an improvement to the house because I went from single pane wood windows to double pane energy-efficient windows.”
But Swecker reiterates that the specific improvements added to your cost basis really only matter if you have to pay capital gains tax.
To qualify for the capital gains exclusion, you’ll need to meet the criteria of a three-pronged test:
If any don’t apply or if your capital gains exceed the amount you can exclude, you must pay the capital gains tax.
Short-term capital gains apply if you’ve owned your house for less than a year before selling it. If your home sale gives you a short-term capital gain, it’ll be taxed at your federal income tax rate.
If you’ve owned your home for longer than a year when selling, you’d be subject to long-term capital gains, which is generally lower than ordinary income tax rates.
Review HomeLight’s comprehensive capital gains tax bracket breakdown to see where you land and find your rate.
See? Taxes on your home sale aren’t that scary. When in doubt, talk to a tax advisor to save the most money this tax season.
Corinne Rivera is a content writer at HomeLight. She writes about every step of the real estate process, from paint colors that add value, to the terms of closing documents, and everything in between. When she’s not creating real estate content, you can find her exploring open houses, watching HGTV, or redesigning her apartment…again.
To connect on social media, you’ll find Money Girl on Facebook, Twitter, and Google+. Also, if you’re not already subscribed to the Money Girl podcast on Apple Podcasts or the Stitcher app, both are free and make sure that you’ll get each new weekly episode as soon as it’s published on the web. The show is also on the Spotify mobile app! Click here to sign up for the free Money Girl Newsletter!
House on wooden background image courtesy of Shutterstock.
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At tax time, itâs often hard to predict how much youâll owe or receive in a tax refund without actually doing your taxes. But there are some telltale red flagsâ¦
In response to the ongoing coronavirus emergency, the Internal Revenue Service (IRS) is offering federal tax relief to Americans. It’s part of emergency declarations that were enacted due to the Stafford Act. This response will undoubtedly help citizens and businesses cope with the crisis.
But what you may not know is that changes to the tax deadline affect several aspects of your financial life. In this post, I’ll explain what coronavirus tax relief is and 10 ways it affects your finances.
The central feature of tax relief during the coronavirus pandemic is that the due date for filing and paying your 2019 federal taxes is postposed from April 15, 2020 to July 15, 2020.
You don’t have to be sick or negatively impacted by COVID-19 to qualify for this federal tax postponement. It applies to any person or entity, such as those who are self-employed, an unincorporated business, a corporation, estate, or trust that has 2019 taxes due on April 15. It doesn’t matter if April 15 is the original date for your return on an extension date you previously filed for—your new due date is still July 15.
There’s absolutely nothing that taxpayers need to do to take advantage of this relief.
There’s absolutely nothing that taxpayers need to do to take advantage of this relief. The postponement will happen automatically for any amount you owe or any installment payment you were asked to make on April 15.
Of course, many Americans are expecting a tax refund. When you overpay taxes during the year, the IRS settles up with you during tax season by issuing a refund.
If you’re owed a tax refund, never wait to file your tax return. The sooner you send it in, the faster you’ll receive your money back. Getting a direct deposit is always faster and safer than a paper check. So, be sure to include your banking information with your return, so you receive your refund electronically.
As a result of the postponement of the due date for filing and paying federal income taxes until July 15, 2020, you’ll get a pass on interest and penalties if you pay up by then. However, the extra fees will begin to accrue on July 16, 2020.
Depending on where you live, you may have to pay state income taxes, which have not been postponed. However, it’s possible that the states affected the most by the coronavirus could enact relief measures of their own.
Depending on where you live, you may have to pay state income taxes, which have not been postponed.
Seven states don’t charge income tax, including Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Additionally, New Hampshire and Tennessee don’t tax earned income, but they do tax your investment income.
If you live in any of the remaining 41 states, plan on filing and paying your state taxes as usual. Check with your state’s tax agency or Department of Revenue to learn more and stay as up to date as possible.
But what if July 15 comes and you need more time? Individuals and businesses can request an automatic extension to delay filing federal taxes. However, this doesn’t give you more time to pay what you owe, only more time to submit your tax form.
To get a federal extension, individuals must submit IRS Form 4868 on IRS.gov, using tax software, or through your tax professional, before the July 15 deadline. Most incorporated businesses must file IRS Form 7004.
If you choose to file an extension request, that would give you until October 15, 2020, to file your 2019 return.
If you choose to file an extension request, that would give you until October 15, 2020, to file your 2019 return. But again, to avoid interest and penalties on any outstanding tax liability, you must pay an amount you estimate is due with your extension request.
If you need a state tax filing extension, check with your state’s tax agency to see what’s possible.
If you’re ahead of the game and already filed your 2019 taxes and scheduled payment to occur on April 15, you have options. If you don’t want your payment to go through, you can reschedule or cancel it until two business days before the payment date.
In other words, April 10 would be the last day to make a tax payment change. However, I wouldn’t wait until the last minute if you plan to reverse or modify it.
To make a change, visit the tax payment portal you initially used and follow the instructions. If you authorized an electronic funds withdrawal from your bank account, contact a U.S. Treasury Financial Agent at 888-353-4537 to request a cancellation. And if you scheduled a tax payment using a credit card, contact the issuer to cancel the card payment.
Most businesses make estimated tax payments each quarter. The 2020 schedule is:
So, the first estimated payment that businesses need to make this year will be due on June 15, 2020.
What about information returns that must be filed by certain types of businesses, or taxes that are due on other dates, such as May 15 or June 15? Unfortunately, individuals and businesses that have filing or payment due dates other than April 15 don’t get any relief at this time.
Again, the assistance only applies to federal income tax returns or payments due on April 15, 2020.
If you or your business owe tax other than income tax, such as sales tax, excise tax, payroll tax, gift tax, or estate tax, you must file and pay them as usual.
You typically have until April 15 to make health savings account (HSA) contributions for the prior year. Under this relief, you can now make HSA contributions for 2019 at any time until July 15, 2020.
To qualify for an HSA, you must be covered by a qualifying high-deductible health plan that you get through work or on your own. In early March, the IRS issued a notice that a high-deductible health plan may cover the cost of COVID-19 testing and treatment before your deductibles are met. Also, just as before the coronavirus, you can pay for medical testing and treatment using funds in your HSA.
Just like with an HSA, you typically have until April 15 to make contributions to a traditional IRA or a Roth IRA. Because the tax filing date is postponed to July 15, you can make IRA contributions for 2019 at any time until July 15, 2020.
However, for most workplace retirement plans, such as a 401(k) or 403(b), the deadline corresponds to the calendar year. So, December 31, 2019, was the last day to make 2019 contributions for accounts offered by an employer.
While this tax relief may not be enough to buoy many people and businesses that have been affected most by the coronavirus pandemic, it’s just one measure. There will be broader fiscal relief enacted to minimize the economic impact of this ongoing health crisis.
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If you haven’t filed your taxes, don’t panic! Here are three last-minute tax tips for homeowners that will save you money, headaches, and more.
The post Don’t Panic! 3 Money-Saving, Last-Minute Tax Tips for Homeowners appeared first on Real Estate News & Insights | realtor.com®.